(Beta and required return) The riskless return is currently 6%and Chicago Gear has estimated the contingent returns given here.a. Calculate the expected returns on the stock market and onChicago Gear stock. b. What is Chicago Gears beta? c. What isChicago Gears required return according to the CAPM? RealizedReturn State of the Market Probability that State Occurs StockMarket Chicago Gear Stagnant 0.20 (10%) (15%) Slow growth 0.35 1015 Average growth 0.30 15 25 Rapid growth 0.15 25 35
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